President Obama could learn a lesson from this fable about a great ship.

Having received ample warning of icebergs ahead, some of the crew of the HMS Titanic proposed changing course to avoid them.

But the captain objected.

“Making that maneuver would end this cruise as we know it.  It would disrupt the passengers’ peace of mind, discomfiting them as we turn and swerve, especially those below decks in steerage,” the captain told them.  “There is no immediate jeopardy and I am appointing a commission to consider other options.”

The captain then activated the ship-wide public address system and announced, “This is the captain speaking.  We are happy to have you aboard the greatest and most unsinkable ship ever built.

“I am told there are icebergs ahead, but as you can tell we have not hit any and we are still afloat.  To avoid them will require sacrifice, but not at the expense of our passengers in steerage, who include seniors, poor children, and the disabled.

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It’s worse than we thought. The trustees for Social Security and Medicare have filed their annual report, and the news is that the two entitlements will expire earlier than reported last year. Medicare, in particular, is expected to run out of funds in 2024- five years earlier than was anticipated in prior years. Of course the Obama administration, with its spin-to-win “new math,” is reporting- now try to follow this one- that even though Medicare is running out of funds five years earlier than expected, this is actually eight years longer than it would have without the passage of Obamacare, and that the reason for this is cuts to Medicare Advantage made in the health reform law- the same cuts that President Obama and the Democrats have been denying were in there. Got that?

Congressional Republican leaders have been encouraging an “adult conversation” about government entitlement programs, and Medicare, in particular. And, while some of them have backed away from this conversation for political reasons, i.e., let’s wait until after the 2012 election, Congressman Paul Ryan has demonstrated that he possesses the political courage to get the ball rolling. The crux of the “adult conversation” is the following: that the now anticipated demise of Medicare, as we have known it since its initiation in 1965, is primarily the result of several factors which pertain to both principles of government, as well as finances:

a) Enough previous generations of American taxpayers allowed Congress to save their money for them in government accounts;

b) Program funds, i.e., revenues obtained, as taxes, through automatic deduction from payrolls, have been used, over the years, by Congress without the express permission of American citizens, to pay for other projects;

c) Liberal politicians have been successful at convincing unthinking Americans that the government can make their lives easier and better through continued government programs, like Social Security, Medicare, and Obamacare.

d) Medicare is going broke; health care costs are increasing; and some physicians are choosing to not be Medicare providers, due to cuts in reimbursements, leading to limited access to care.

Many liberal Democrats and, yes, some conservative Americans, have demonized Mr. Ryan for “taking away their Medicare.” Of course, the Democrats hope to gain from convincing senior citizens that Republicans want them to “die,” even though President Obama’s solution to lower Medicare costs is to bring on board the panel of government bureaucrats who will ration care.

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Standard & Poors (S&P), the credit rating agency that started in business more than 150 years ago and operates in 23 countries, issued the ultimate in realty checks this week when they downgraded its credit outlook for the United States.  S&P cited a “material risk” that policymakers may not reach agreement on a plan to trim the large federal budget deficit.

While the agency maintained the country’s top AAA credit rating, it said “Authorities have not made clear how they will tackle long-term fiscal pressures.” S&P said the move signals there is at least a one-in-three chance that it could cut its long-term AAA rating on the United States within two years.

What would a credit rating downgrade mean to the average citizen?  Immediately following a downgrade, the interest required to refinance our debt would climb dramatically and the Federal Reserve would have to print more money resulting in a sharp devaluation of the dollar.  If you think $4 per gallon for gasoline is an outrage, try $8 per gallon or higher.  If you think that your 401(k) took a hit in 2009, how about a permanent hit due to the United States currency losing its value?  Food, energy, clothing, housing and all other staples of life will experience sharp and permanent price increases.  Unemployment will also rise as businesses attempt to adjust to a new and uncertain economy.

It should be absolutely clear that the growing national debt and continued federal budget deficits are a threat to our economy and a clear and present danger to our way of life.  President Obama took office with a $10 trillion debt and a $740 billion federal budget deficit.  Two years later the national debt is $14.2 trillion and the federal budget deficit has reached $1.6 trillion.  Mr. Obama and the Democrats insist that we need to keep spending, even though our debt will exceed our Gross Domestic Product (GDP) before the end of this year.  They insist that rolling back the George Bush era tax cuts for those making more than $250,000 per year and reductions in defense spending is the path to a solution.

The truth is that the additional revenue potential from rolling back those cuts would only equal a maximum of $64 billion per year.  The risk to jobs in our economy by increasing tax rates on many small businesses that are taxed as individuals, S-Corporations, is extremely high.  There could easily be a spike in unemployment as those business owners adjust their planning to preserve their net income.

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From The Wall Street Journal:

Our budget, which we call The Path to Prosperity, is very different. For starters, it cuts $6.2 trillion in spending from the president’s budget over the next 10 years, reduces the debt as a percentage of the economy, and puts the nation on a path to actually pay off our national debt. Our proposal brings federal spending to below 20% of gross domestic product (GDP), consistent with the postwar average, and reduces deficits by $4.4 trillion.

A study just released by the Heritage Center for Data Analysis projects that The Path to Prosperity will help create nearly one million new private-sector jobs next year, bring the unemployment rate down to 4% by 2015, and result in 2.5 million additional private-sector jobs in the last year of the decade. It spurs economic growth, with $1.5 trillion in additional real GDP over the decade. According to Heritage’s analysis, it would result in $1.1 trillion in higher wages and an average of $1,000 in additional family income each year.

Here are its major components:

• Reducing spending: This budget proposes to bring spending on domestic government agencies to below 2008 levels, and it freezes this category of spending for five years. The savings proposals are numerous, and include reforming agricultural subsidies, shrinking the federal work force through a sensible attrition policy, and accepting Defense Secretary Robert Gates’s plan to target inefficiencies at the Pentagon.

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Wake up America.  We are heading head long into a brick wall and we are ignoring it.  While our elected officials debate spending cuts in the range of $50 billion to $100 billion, our nation is facing trillion dollar deficits for years to come.  The new ten year forecast by the Congressional Budget Office (CBO), scrubbed by The Heritage Foundation of unrealistic assumptions the CBO is required to use, predicts an additional $13.6 trillion will be added to the national debt over the next ten years.  Simply put, by 2021 our debt will climb to $27.9 trillion and will require nearly half of all federal income tax revenues just to pay the interest.

The major reason for this crisis is clear, but there is little courage in Washington, D.C. to address it.  Here it is.  Medicare expenditures have grown 81% since 2000 and Medicaid expenditures have grown 87% since 2000.  It gets worse.  Today there are 39 million Americans over the age of 65, but that number has been growing at the average rate of 10,000 per day since January 1^st of this year and will continue to grow at this rate for the next ten years.  Why?  Baby Boomers born between 1946 and 1955, approximately 36 million, will turn 65 over that period of time and become eligible for Medicare.  With life expectancy at 78 for men and 80 for women, we can safely assume that there will be almost twice as many Americans over the age of 65 by 2021.

Persistent slow growth in the economy due the drag of massive federal debt combined with heavily restrictive regulations on business will continue to suppress job growth and force more citizens on Medicaid.  By 2021 the other half of all federal income tax revenue will be required to pay for Medicare and Medicaid.  Even if we assume that Social Security will pay for itself, which will require substantial tax and benefit reform, where will we find the money to fund all other government expenses – including defense and other entitlement programs such as food stamps?  There is not enough rich, middle-class, corporate or any other income that can be taxed more in order to solve this problem.

The only answer is Medicare and Medicaid reform.

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Our continued annual deficits of over $1.5 trillion will eventually destroy our economy and consume our liberty.  We must deal with this crisis now.  The Left says that the rich need to pay more, that more taxes will solve the problem.  Here is the truth.  If we were to double federal taxes on all Americans, our deficits would still be in excess of $400 billion per year.  There is not enough wealth for more taxes to do any good.  Consider that doubling federal taxes means the top rate would be 70%!  With state and local taxes, Americans would have little left for food and shelter.  The debate is over.  We have no choice but to dramatically cut spending.

Entitlements are the major contributor to the spending crisis and Social Security has long been the most protected of all entitlements.  It needs to be reformed in order to reduce its growing burden on our economy.  The reforms being discussed will not result in anyone currently receiving, or about to receive, benefits having any less than they are expecting.  The Democrats will cry that restructuring Social Security will hurt those who have planned for it, but this is a lie.  All reform options being discussed will only impact those who will have the time to plan for the changes.  The truth is that if Social Security is not reformed, the program will fail.

Democrats point to a $2.3 trillion Social Security Trust Fund surplus.  This is not a cash surplus. It was spent on general government expenses and replaced with Treasury Bonds.  Who is responsible for payment of those bonds? The taxpayer is responsible.  Yes, the Social Security Trust Fund surplus is nothing more than a government I.O.U.  Bernard Madoff could not have done better.

Before the recession accelerated in the fall of 2008, Social Security payroll taxes exceeded benefits paid each year.  Surplus cash, though diverted and replaced with bonds, was being generated.  However, since the labor force lost eight million jobs in the recession, Social Security benefits now exceed payroll taxes collected each year.  With the surplus nothing more than part of the national debt, we have to borrow to make up the difference.

It gets worse.

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Sometimes I wonder why the Republicans wanted to win in 2010 so badly.  I hope it wasn’t in a quest for job security because if they’re really serious about putting the country’s fiscal house in order they are not going to have a happy electorate come 2012…Tea Party small-government rhetoric notwithstanding.

Sure, the majority of Americans claim to be for reducing the size of the state to get our fiscal house in order, but do they really understand just how drastic an impact reverting back to a more laissez-faire market-oriented national model would have on their lives?  Certainly, if the transcript of the SOTUS I skimmed through yesterday is any indication – and, most revealing, where the applause breaks are noted – I think we have a way to go yet.

Consider:  One out of six Americans now receives some form of government assistance.  [U.S.A Today.]  Fifty million are on Medicaid, a record high.  Food stamp enrollment now stands at 40 million, or one in seven people. Ten million Americans receive unemployment benefits, and 4.4 million get direct cash assistance.  And these numbers are from only four of the more than seventy welfare programs funded by the federal government!  These figures are not anomalies caused by a recession, but a reflection of the trend towards an entitlement culture that has been growing steadily since the 1960s “Great Society” pipe dream.

This is a recipe for doom yet no politician, from the President on down, Democran or Republicrat alike, will ever muster the courage to address the meat and potatoes of our spending suicide…so they will whip up ire aimed at the parsley garnish like private jets and federal salaries instead.  So a tipping point is at hand.  Almost 50% of Americans pay no income tax, yet so many in this country suckle up to the government teat in one form or another courtesy of the American taxpayer that I see no possibility of this entrenched political system of careerists doing a necessary ‘reset’ to bring us back to a sustainable, market-driven model.  Rather it will be the eventual verdict of raw and unfeeling mathematics that imposes what we refuse to do voluntarily in the form of defaults, declining and eventually disappearing government services, and reduced if not eliminated entitlement benefits.

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Deflation is a concept many Americans have a tough time understanding.  They do understand the concept of Social Security.  As Federal budget deficits soaring, the public is being barraged by late night advertisements to buy gold as an inflationary hedge.  Unfortunately, the deflationary environment we are facing today is the biggest threat to the Social Security check Joe the Plumber is counting on for retirement.

The definition of deflation as a decrease in the general prices of goods and services may be simple, but a Google search for articles on deflation generates 3.5 million “hits”, versus a whopping 354 million “hits” for inflation.  This demonstrates that Americans are 100 to 1 more knowledgeable of inflation!

There have only been three bouts of deflation in the United States since its founding over 200 years ago. The first was the recession of 1836, when the currency in the United States contracted by about 30%.  The second was after 1865, when the Nation returned to a gold standard by retiring paper money printed during the Civil War.  The third period was the Great Depression, when prices and output fell by 25% from 1928 to 1933.  Very few Americans are familiar with the specifics of what happened during these periods, but they know it was a bad time for the “common man.”

Social Security was established during the Great Depression and continues to be the most important income stream for America’s seniors.  A large majority of the 16 million people over age 65 rely on Social Security for at least half of their income.  One-third of this group relies on Social Security for over 90% of their income.  Most retirees have come to rely on the annual cost-of-living increases in their check to make their life better.  In a deflationary environment we are facing today, few recipients are prepared for their check to actually shrink.

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Like a junkie that keeps increasing his fix to get the same high, the U.S. Government deficit spending addiction has expanded by an all-time record 9.66% compound annual rate of the growth over the last thirty years.  Even during the tumultuous three decades that included the Great Depression, World War II and the Cold War, the U.S. deficit only expanded at an 8.51% compounded growth rate.  Fortunately, the American people are increasingly convinced that feeding this addiction not only does not work; it might be dangerous.

U.S. Federal Reserve Chairman, Ben Bernanke, earned the title “Helicopter Ben” from critics who latched onto his quote; “The U.S. government has a technology, called a printing press that allows it to produce as many U.S. dollars as it wishes at no cost.”  Mr. Bernanke went on to state that the Federal Government could always rent helicopters and fly over cities dumping out cash to get the economy moving.  This is the equivalent of the “pusher man” who gives out free samples of narcotics expecting that the users get hooked.

From the outset of the financial crisis, the U.S. Federal Government has been flying its helicopters over America and sprinkling huge amounts of money on programs such as, “Making Homes Affordable”, “Cash for Clunkers”, unemployment benefit extensions, infrastructure boondoggles and various Wall Street crony bailouts.  This spending and guarantee orgy during 2009 resulted in a U.S. budget deficit of $2.5 trillion and only generated an incremental increase in GDP of $200 million.  Only government can avoid going to prison for involuntarily taking a dollar from a person, squandering 92 cents and giving a nickel and three pennies back.

Passage of the $787 billion American Recovery and Reinvestment Act (ARRA) was trumpeted as the silver bullet to save the economy and create 3.5 million jobs.  The Administration estimated that although each job would cost taxpayers $92,136, the resulting increase in gross domestic product of $105,000 would more than pay for the cost.  But a referral to “Recovery.Com”, the official U.S. government web site regarding ARRA “funded jobs”, states that only 681,825 jobs have been funded so far and at a cost of $117,933 each.  Consequently the US Government actually spent $25,797 in overhead cost for a make work job.  Further more, given that the average American working in the private sector makes only $36,400 per year, it would take the equivalent of 3.24 full-time workers taxed at 100% of their annual income to pay for one make work job.

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On Wednesday, I testified before the Congress about the biggest Rip-Off of the century.  And I can’t say that anyone really cared.

I was arguing that the deceptive  accounting techniques used by  the federal government–techniques that would send anyone to jail in the private sector– is hiding the fact that $4 trillion (more than the federal government spends in a year) is unaccounted for. Well, it’s accounted for but as if the money still exists, when in fact, it has been gone for a while. And guess who will be stuck with the tab?

Okay, now bear with me because it’s a little geeky. However, I promise that this is a story worth reading  about (if you like sickening stories that is).

Remember Al Gore’s lock box or FDR’s bank-account-with-your-name-on-it? Yes, the lock box in which your payroll taxes were supposed to go to produce interests until you can get it back in the form Social Security and Medicare payments when you are old and sick. Well, as it turns out, the federal government had the key of that lock box and helped itself with the $4 trillion accumulated to pay for its daily consumption of wars, Prescription Drug Bill, Freddie and Fannie and ACORN and else.

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In the vernacular of financial commentary, “PIGS” is the term recently coined by the financial markets to refer to sovereign countries whose economies are virtually bankrupt and whose bonds are virtually worthless. These are the basket cases of the international economic system — Portugal, Italy, Greece and Spain.  Recent evidence suggests that the fiscally irresponsible PIGS may soon have a new applicant for membership in their club.  Membership in this particular club is somewhat reminiscent of Groucho Marx’s famous remark that “I wouldn’t belong to any club that would have me for a member.” The new expanded club’s acronym is shaping up to be (you guessed it) USPIGS.  No, the United States is not about to go bankrupt.  Not yet, anyway. We are, however, pursuing the very same types of vast spending policies that brought the PIGS of Europe face to face with that real possibility.

What have we done recently to be considered for membership in this club of dubious distinction?  Last week, government budget personnel revised their estimate of when Social Security would begin running in the red from 2017 to, essentially, “right away.”  Yes, Social Security is broke…right now!  So much for government estimates.

The announcement of this distressing news was, it appears, kept well under wraps until Nancy Pelosi and Harry Reid along with a shamelessly compliant Democratic Congress safely ramrodded Obamacare, with its astonishing price tag, into law. The entitlement sinkhole just got an order of magnitude bigger.  “But,” one might ask,  “haven’t we been accumulating all the excess funds paid into Social Security all these years in a special trust fund.”  Well, not exactly.  In fact, not even almost exactly.  You see, the government has been vacuuming out the excess cash as soon as it comes in and spending the money (the money we all paid in) to pay the government’s current bills.  The trust-fund cash has been replaced all this time with IOU’s (that’s internal Treasury debt), which are now being called to meet current payment obligations.  These IOU’s are being replaced, of course, with even more IOU’s but this time there is no more cash to divert from payroll taxes to fund government operations. We have to borrow more.

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The “Perfect Storm,” described by author Sebastian Junger in his 1997 best-selling novel by the same name, referred to a confluence of weather conditions that produced a monster hurricane off the coast of New England.  Today the term is commonly used to describe any combination of circumstances that drastically aggravate any given situation. For example, an exponential increase in the number of retired elderly Americans who require more health care being supported by a declining number of young Americans who provide the funds to cover those health care costs. With over 70 million baby boomers about to retire we, indeed, have the conditions for a perfect storm.

The President and Congress seem to have no trouble grasping the logic that the more people who share the cost of health care the less the cost per capita will be.  In fact, the very cornerstone of their health care program is that everyone be required to pay into the system with which we manage the nation’s health care.  That same logic, however, seems to elude them when it comes to sharing the growing cost of government.  They consistently propose that we compensate for the ever-diminishing number of American taxpayers by simply increasing the taxes on those who already pay the most.  Their mantra for every expansion of government programs is that the wealthy should pay their fair share. How can you argue with that? Shouldn’t everyone pay his or her fair share, whatever that is?

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The Debt Sea, that ocean of red ink that threatens to overflow its banks and inundate every nook and cranny in America from Main Street to Wall street, is bordered on the south by the Potomac River, to the east-southeast by the Anacostia River, to the north-northeast by Prince Georges County, Maryland, to the north-northwest by Montgomery County, Maryland and to the immediate west by Georgetown and the historic 175-year-old Chesapeake-and-Ohio Canal.

The Debt-Sea Scrolls tell a story of evolving fiscal folly that could represent one of the greatest man-made disasters ever — the destruction of mankind’s most successful experiment in governance and the crippling of an economic system that produced the greatest sustained prosperity the world has ever known.  The first of the Debt-Sea Scrolls was written around 80-years ago when the government believed it could spend its way out of the Great Depression with money it didn’t have…with money it didn’t even almost have.  The programs (known as the “New Deal”) described in the first of the Debt-Sea Scrolls didn’t succeed in revitalizing American industry.  It was The Second World War and the massive Lend-Lease program with which we became the “Arsenal for Democracy” that finally succeeded in revitalizing American Industry. By the time the war was over, so was the Great Depression. Unemployment had plummeted to below 2.0% by the time the war ended in 1945 from 14.6% in 1940, which was essentially the rate of unemployment during the early years of the depression and seven years of New Deal Keynesian prime-the-pump policies.  Following the war, American industry converted from wartime to peacetime production and the rate of unemployment remained below 6.0% for over a decade and for most of the half century that followed.

We learn from the Debt-Sea Scrolls that unsustainable national debt, fueled by easy credit that required borrowers to have very little skin in the game (sound familiar?) was, more than any other factor, generally credited with igniting the economic conflagration we now know as the Great Depression.  Ironically we are now, seventy years later, adding unsustainable debt (to already unsustainable debt) at a level many economists believe will seriously impede our recovery and may end any hope of returning to robust prosperity.  We are, systematically, mortgaging the future of our children, their children and their children’s children as well.

Let us pause to consider the debt-spawning spending spree on which the government has embarked and proposes further to accelerate.

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Controlling obesity is all the rage now in America as, indeed, it should be. Feeding the American appetite with too many of the wrong kinds of calories is exacting a terrible toll on the health of Americans of all ages. Obesity, like cigarettes, kills. In recent years, Congress, along with a compliant President Bush and now with an enthusiastic President Obama, has been appeasing another kind of appetite with reckless abandon. The toll this fiscal obesity will exact from America and our people is incalculable and Jenny Craig will be of no help.

Clearly, most Americans do not want to be force fed programs they haven’t asked for and that they know neither they, their children nor their grandchildren can possibly afford. People throughout the country are beginning to dig in their heels and a growing number of congressmen and senators know it. Seventy years ago, Japanese Admiral Isoroku Yamamoto is quoted, following his successful and deadly attack on Pearl Harbor, “I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve.” It appears that the American electorate, long apathetic and used to acquiescing by default to reckless government spending may be awakening from its long slumber. Let’s hope so, for it is the last best hope we have to rein in the destructive behavior of so many of our elected representatives of both parties in Washington and the White House strategists who lead them on.

As we noted in this column two weeks ago, Moody’s has fired the first warning shot over the bow of our ship of state. The international credit-rating agency warned that America’s AAA credit rating would be in jeopardy (given our spiraling debt) if economic growth does not keep pace with the projections made by the Obama Administration. China and Japan, our largest sovereign creditors, fired two more warning shots at last week’s treasury auction when they decreased their purchases of U.S. debt. But is anyone in Washington listening?

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Ironically enough, the medicine applied by our state as the antidote for our ills has proven to be poison.  The welfare state is killing our nation.  Today entitlement spending makes up nearly half of our budget.  Long term, we know that there will be no way to pay off our unfunded obligations — we will go bankrupt.  There will be three options ultimately, though ultimately can come quite suddenly: default, hyperinflation or abolition of the welfare state.

Default is considered by many to be an impossible option as it would likely lead to mass chaos given the necessary suspension of many government services, not to mention the practical reality that WE are the collateral in the event of default.  To default is to be honest, and to be honest is anathema to the state.

Hyperinflation in my view is the most likely outcome given the massive increase in the money supply, which is good for politicians until it hits because it allows them to kick problems down the road and impose a stealth tax.  Currently, government is toeing the line between monetizing debt and intervening to keep its borrowing rates down, while incentivizing banks to keep money in their vaults or pump it into the stock market.

I believe that as the downturn goes on the government will blame the banks for the lack of economic growth and force them to allocate credit to chosen political entrepreneurs and other bad credit risks, leading to massive inflation in prices which they will likely blame on evil speculators and greedy price gouging companies.  Hyperinflation would allow the government to pay for the welfare state –  by writing entitlement checks in worthless dollars and lead to economic paralysis as constantly rising prices would make economic calculation and thus commerce impossible.

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From the fine folks at CATO Institute comes this chart, detailing the allocation of federal spending:

It is mentioned, almost in passing, that the “healthcare reform” on the verge of becoming law starts collecting premiums and taxes immediately, and promises benefits only in about four years.

What kind of emergency is that?

It’s not a healthcare emergency. It’s what might be called a Madoff emergency.

Whether starry-eyed utopians or cynical malefactors, the unnamed, possibly unnameable they have high ambitions for Washington to achieve their objectives. The stars are aligned for their coup d’etat, but there is one little problem: the country is out of money.

This problem threatens to stop not only their agenda, but the whole game. Washington has 2 million employees on the payroll, earning on average twice as much as those in the private sector. And probably more than a hundred million dependents—recipients of Social Security, Medicare, Medicaid, and grants and subsidies of all types. What happens if the checks stop coming?

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Just came across some rather grim analysis of the economic impact of massive, ongoing federal budget deficits from a group of prominent economists. It’s a little dated (2004) but still highly relevant considering that the deficit situation has dramatically worsened since then. Some highlights:

Substantial ongoing deficits may severely and adversely affect expectations and confidence, which in turn can generate a self-reinforcing negative cycle among the underlying fiscal deficit, financial markets, and the real economy:

• As traders, investors, and creditors become increasingly concerned that the government would resort to high inflation to reduce the real value of government debt or that a fiscal deadlock with unpredictable consequences would arise, investor confidence may be severely undermined;
• The fiscal and current account imbalances may also cause a loss of confidence among participants in foreign exchange markets and in international credit markets, as participants in those markets become alarmed not only by the ongoing budget deficits but also by related large current account deficits;
• The loss of investor and creditor confidence, both at home and abroad, may cause investors and creditors to reallocate funds away from dollar-based investments, causing a depreciation of the exchange rate, and to demand sharply higher interest rates on U.S. government debt;

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Last week, as the national debt topped $12 trillion for the first time in U.S. history, one influential policymaker said, “I think it is important, though, to recognize if we keep on adding to the debt … that at some point, people could lose confidence in the U.S. economy in a way that could actually lead to a double-dip recession.”

This analysis was delivered by President Barack Obama, on whose watch “red ink as far as the eye can see” has become the status quo.

While mostly accurate, President Obama’s comments actually miss the fact that our rapidly decaying fiscal situation has already undermined confidence in the U.S. economy.  Washington Democrats saw to that with a trillion-dollar ‘stimulus’ that was supposed to be about creating jobs, but has instead produced countless examples of wasteful government spending while more than three million more Americans have lost their jobs.

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